Friday, 4 December 2015

The one word that best
summarises what drives this improvement is 'competition'. It is competition that
brings such significant progress shifts for people in society. If you have a
monopoly on a good or service there is no selection pressure to improve and
innovate, as consumers have nowhere else to go as an alternative. But with competition,
providers are continually looking to improve products, innovate to offer
something new, and retain competitive prices too. It is competition that drives human progress; it is through competition that resources are most efficiently allocated; and it is competition that provides signals regarding which goods and services we want and need, and with whom co-operation will be most beneficial. The more it is realised that competition is the driving force of efficiency, innovation, improved material well-being, and the principal route by which people are lifted out of poverty, the more it is realised that we continually need more market and less government in our daily transactions. EDIT TO ADD: When I said
"we continually need more market and less government in our daily
transactions.", a couple of people for some reason thought that was an
endorsement for what they often like to call 'unbridled' or 'unfettered'
capitalism. It was no such thing. And on that point, let me correct a popular
misconception: almost no pro-market person I've ever met thinks that the market
should be allowed to run with no government regulatory protocols. So, then, I
do not mean that the government shouldn't regulate - here I am talking about
the government as an agent in the economy in its own right, i.e. one that
produces goods and services. When the government produces goods and services it
is usually done so through an absence of, or too little, competition - in fact,
when the government runs the service it usually has a monopoly on that service,
which stultifies competitive forces.

In saying we need more
market and less government, I was talking about their role in the economy as
agents of manufacturing, and how competitive firms are more efficient at that.
Governments need to regulate, where regulation should only mean forms of light
intervention to direct for the common good the way providers and consumers
behave. However, to do this it is imperative that the politicians that
intervene understand the full range of costs and benefits associated with their
actions - and alas they frequently demonstrate to me that they do not (in some
cases, of course, they will understand but ignore that understanding because
the right decision will be an unpopular one in terms of votes). A nigh-on
perfectly reliable rule of thumb is that when politicians try to interfere in
the natural mechanism of prices they are getting it wrong. But that doesn't
mean there are not necessary government interventions - some light regulation
is essential.

About Me

This is the Blog of James Knight - a keen philosophical commentator on many subjects.
My primary areas of interest are: philosophy, economics, politics, mathematics, physics, biology, chemistry, theology, psychology, history, the arts and social commentary.
I also contribute articles to the Adam Smith Institute and the Institute of Economics Affairs.
Hope you enjoy this blog! Always happy to hear from old friends and new!
Email:j.knight423@btinternet.com